Cameron v. Oakland County Gas & Oil Co. , 277 Mich. 442 ( 1936 )

The contest in this case is between the landlord, the owner of leased premises, and the tenant who erected buildings thereon for the purpose of operating an oil and gas station. The lease contained no specific provision as to the ownership of the buildings at the expiration of the leasehold. The rights of the parties are governed by the applicable law.

The sole question involved is whether the tenant has a right to remove the buildings erected by him upon the leased premises, during the continuance of his lease or within a reasonable time after its expiration.

There is no claim the buildings were on the premises when leased or that the landlord contributed anything toward their building and erection. On the one hand, it is contended these buildings, having been structures more or less permanent, remain a part of the real estate and may not be removed. On the other, it is contended they were erected for the purpose of carrying on the business or trade of the tenant and may be removed by him.

In the early case of Van Ness v. Pacard, 2 Pet. (27 U.S.) 137, this question was before the Supreme Court of the United States, and in the opinion therein Mr. Justice Story reviewed the authorities. It is said, p. 143:

"The general rule of the common law certainly is, that whatever is once annexed to the freehold, becomes part of it, and cannot afterwards be removed, except by him who is entitled to the inheritance. The rule, however, never was, at least so far back as we can trace it in the books, inflexible, and without exceptions. It was construed most strictly between executor and heir, in favor of the latter; more liberally, between tenant for life or in tail and remainder-man or reversioner, in favor of the former; and with much greater latitude, between landlord and tenant, in favor of the tenant. But an exception of a much broader cast, and whose origin may be traced almost as high as the rule itself, is of fixtures erected for the purposes of trade. Upon principles of public policy, and to encourage trade and manufactures, fixtures which were erected to carry on such business were allowed to be removed by the tenant during his term, and were deemed personalty, for many other purposes. The principal cases are collected and reviewed by Lord Ellenborough in delivering the opinion of the court, in Elwes v. Maw, 3 East, 38 (102 Eng. Rep. 510); and it seems unnecessary to do more than to refer to that case for a full summary of the general doctrine, and its admitted exceptions, in England. The court there decided, that in the case of landlord and tenant, there had been no relaxation of the general rule, in cases of erections, solely for agricultural purposes, however beneficial or important they might be as improvements of the estate. Being once annexed to the freehold by the tenant, they became a part of the realty, and could never afterwards be severed by the tenant. The distinction is certainly a nice one between fixtures for the purposes of trade, and fixtures for agricultural purposes; at least, in those cases where the sale of the produce constitutes the principal object of the tenant, and the erections are for the purpose of such a beneficial enjoyment of the estate. But that point is not now before us; and it is unnecessary to consider what the true doctrine is, or ought to be, on this subject. However well settled it may now be in England, it cannot escape remark, that learned judges, at different periods, in that country, have entertained different opinions upon it, down to the very date of the decision inElwes v. Maw, supra.

"The common law of England is not to be taken, in all respects, to be that of America. Our ancestors brought with them its general principles, and claimed it as their birthright; but they brought with them and adopted, only that portion which was applicable to their situation. There could be little or no reason for doubting, that the general doctrine as to things annexed to the freehold, so far as it respects heirs and executors, was adopted by them. The question could arise only between different claimants under the same ancestor, and no general policy could be subserved, by withdrawing from the heir those things which his ancestor had chosen to leave annexed to the inheritance. But between landlord and tenant, it is not so clear, that the rigid rule of the common law, at least, as it is expounded in Elwes v. Maw, was so applicable to their situation, as to give rise to necessary presumption in its favor. The country was a wilderness, and the universal policy was, to procure its cultivation and improvement. The owner of the soil, as well as the public, had every motive to encourage the tenant to devote himself to agriculture, and to favor any erections which should aid this result; yet, in the comparative poverty of the country, what tenant could afford to erect fixtures of much expense or value, if he was to lose his whole interest therein, by the very act of erection? His cabin or log-hut, however necessary for any improvement of the soil, would cease to be his, the moment it was finished. It might, therefore, deserve consideration, whether, in case the doctrine were not previously adopted in a State, by some authoritative practice or adjudication, it ought to be assumed by this court as a part of the jurisprudence of such State, upon the mere footing of its existence in the common law. At present, it is unnecessary to say more, than that we give no opinion on this question. The case which has been argued at the bar may well be disposed of, without any discussion of it.

"It has been already stated, that the exception of buildings and other fixtures, for the purpose of carrying on a trade or manufacture, is of very ancient date, and was recognized almost as early as the rule itself. The very point was decided in 20 Hen. VII. 13 a and b, where it was laid down, that if a lessee for years made a furnace for his advantage, or a dyer made his vats or vessels to occupy [carry on] his occupation, during the term, he may afterwards remove them. That doctrine was recognized by Lord Holt, in Poole's Case, 1 Salk. 368 (91 Eng. Rep. 320), in favor of a soap-boiler, who was tenant for years. He held, that the party might well remove the vats he set up in relation to trade; and that he might do it by the common law (and not by virtue of any custom), in favor of trade, and to encourage industry. In Lawton v. Lawton, 3 Atk. 13 (26 Eng. Rep. 811), the same doctrine was held, in a case of a fire-engine, set up to work a colliery by a tenant for life. Lord Hardwicke there said, that since the time of Henry VII., the general ground the courts have gone upon, of relaxing the strict construction of law is, that it is for the benefit of the public, to encourage tenants for life to do what is advantageous to the estate, during the term. He added, 'one reason that weighs with me is, its being a mixed case, between enjoying the profits of the land, and carrying on a species of trade; and, considering it in this light, it comes very near the instances in brewhouses, etc., of furnaces and coppers. The case, too, of a cider-mill, between the executor and heir * * * is extremely strong; for though cider is a part of the profits of the real estate, yet, it was held by Lord Chief Baron Comyns, a very able common lawyer, that the cider-mill was personal estate notwithstanding, and that it should go to the executor. It does not differ in my opinion, whether the shed be made of brick or wood, for it is intended to cover it from the weather and other inconveniences.' In Penton v. Robart, 2 East, 88 (102 Eng. Rep. 302), it was further decided, that a tenant might move his fixtures for trade, even after the expiration of his term, if he yet remained in possession; and Lord Kenyon recognized the doctrine in its most liberal extent.

"It has been suggested at the bar, that this exception in favor of trade, has never been applied to cases like that before the court, where a large house has been built, and used in part as a family residence. But the question, whether removable or not, does not depend upon the form or size of the building, whether it has a brick foundation or not, or is one or two stories high, or has a brick or other chimney. The sole question is, whether it is designed for purposes of trade or not? A tenant may erect a large as well as a small messuage, or a soap-boilery of one or two stories high, and on whatever foundations he may choose. In Lawton v. Lawton, supra, Lord Hardwicke said (as we have already seen), that it made no difference, whether the shed of the engine be made of brick or stone. In Penton v. Robart, supra, the building had a brick foundation, let into the ground, with a chimney belonging to it, upon which there was a superstructure of wood. Yet the court thought the building removable. In Elwes v. Maw, supra, Lord Ellenborough expressly stated, that there was no difference between the building covering any fixed engine, utensils, and the latter. The only point is, whether it is accessory to carrying on the trade or not. If bona fide intended for this purpose, it falls within the exception in favor of trade."

The rule thus established by the supreme court of the United States is the rule in relation to buildings of this kind.

In District Township of Corwin v. Moorehead, 43 Iowa, 466, plaintiff, with the consent of the defendant, built a frame schoolhouse one story high on land owned by defendant. The question was whether the plaintiff could remove it. The court said:

"If it is erected by the builder with his own money, and for his own exclusive use, as disconnected from the use of the land, and with an agreement to that effect between the owner of the land and the builder, it will, as between the parties, be considered personal property.

Plaintiff was held to have a right to remove the building.

In Wilgus Ewing v. Gettings Giddings, 21 Iowa, 177, defendants' grantors erected a slaughter-house, sheds and pens upon the premises with the knowledge and assent of the agent of the owners. They sought to replevin the buildings, when a suit was brought to enjoin replevin. The court said:

"We place our decision of the cause upon the ground that the improvements or property in controversy were made and erected on the land, upon the faith of, at least, an implied license, given or sanctioned by the owner," and the persons who erected the buildings were held entitled to remove them.

In Rush County Board of Commissioners v. Stubbs, 25 Kan. 322, plaintiffs owned a building one story in height used for county offices. They placed it upon a stone foundation on a tract of land which defendant afterwards acquired. Notwithstanding the building was erected on a stone foundation, it was held to remain personal property, subject to removal.

In Wittenmeyer v. Board of Education of Brooklyn, Ohio, 10 Ohio Cir. Ct. 119, a building was erected on leased land by a lessee for use as a schoolhouse. The court held this remained personal property, quoting with approval the language of Justice Story in Van Ness v. Pacard, supra.

In Fuller v. Tabor, 39 Me. 519, a dwelling house was erected upon the land of another who converted the building to his own use. Plaintiff sued in trover for its conversion and was held entitled to recover.

In Central Branch R. Co. v. Fritz, 20 Kan. 430 (27 Am. Rep. 175), where replevin was brought for a house, the court said:

"It has been held that a stone pier, 'firmly inbedded in the earth,' was under certain circumstances only personal property. * * * It has also been held that structures resting on solid foundations firmly imbedded in the earth, are sometimes only personal property. (King v. Inhabitants of Otley, Suffolk, 1 B. Ad. 161 [109 Eng. Rep. 747]; Wansborough v. Maton, 4 Ad. E. 884 [111 Eng. Rep. 1016]. Many American cases might also be referred to on this point, among which see, Hartwell v.Kelly, 117 Mass. 235; White's Appeal, 10 Pa. 252; Adams v.Goddard, 48 Me. 212; Alexander v. Touhy, 13 Kan. 64.) Even dwelling-houses, resting upon solid and firm foundations, are sometimes not a part of the realty, but only chattels."

In Curtiss v. Hoyt, 19 Conn. 154 (48 Am. Dec. 149), it was held that when a building is erected by the tenant with his own money and for his own exclusive use as disconnected from the use of the land, it is removable at his pleasure.

In Doty v. Gorham, 5 Pick. (27 Mass.) 487 (16 Am. Dec. 417), the plaintiff sued defendant for the removal of a shop from his property. The court said:

"The shop being erected for the purposes of trade, the tenant had a right to remove it at any time during the continuance of the estate. Elwes v. Maw, 3 East, 52 (102 Eng. Rep. 510). And had the landlord determined the estate, the tenant would have been entitled to sufficient time to remove his shop and other property."

In Watriss v. First National Bank of Cambridge, 124 Mass. 571 (26 Am. Rep. 694), the court held that the tenant had a right to remove fixtures at any time during the continuance of his lease or within a reasonable time thereafter.

This is the rule recognized in 13 Am. Eng. Encyc. of Law (2d Ed.), p. 650, and in 36 C. J. p. 176, § 827, where the later American authorities are collected.

The rule that buildings erected by a tenant upon leased premises at his own expense and for his own use and benefit may be removed at any time during the tenancy or within a reasonable time thereafter has been extended to dwelling houses as well as to schoolhouses, Carpenter v. Smith, 40 Mich. 639;Harris v. Gillingham, 6 N.H. 9 (23 Am. Dec. 701);Ingalls v. Railway Co., 39 Minn. 479 (40 N.W. 524, 12 Am. St. Rep. 676; Jewett v. Patridge, 12 Me. 243 (28 Am. Dec. 173);Osgood v. Howard, 6 Greenl. (6 Me.) 452 (20 Am. Dec. 322); and to a dwelling house and barn, Dame v. Dame, 38 N.H. 429 (75 Am. Dec. 195); and to gas pipes laid in the public streets,Providence Gas Co. v. Thurber, 2 R.I. 15 (55 Am. Dec. 621); to a two-story oatmeal mill with a one-story brick addition,Merchants' National Bank of Crookston v. Stanton, 55 Minn. 211 (56 N.W. 821, 43 Am. St. Rep. 491); to saw mills, Russell v.Richards, 10 Me. 429 (25 Am. Dec. 254); to corn-cribs erected on the right of way of a railroad, Fischer v. Johnson,106 Iowa, 181 (76 N.W. 658); to a frame building, Osborn v. Potter,101 Mich. 300; to a barn, Byrnes v. Palmer, 113 Mich. 17; to other buildings, Kerr v. Kingsbury, 39 Mich. 150 (33 Am. Rep. 362); to a shingle mill frame, Bartlett v. Haviland, 92 Mich. 552; to an extensive manufacturing plant, Davidson v. CrumpManfg. Co., 99 Mich. 501; to engine and pump houses and residence buildings, Conrad v. Saginaw Mining Co., 54 Mich. 249 (52 Am. Rep. 817); to schoolhouses erected under lease, Hayward v. School District No. 9, of the Township of Hope, 139 Mich. 539.

The right of the tenant to remove the erections made by him in furtherance of the purpose for which the premises were leased is one founded upon public policy and has its foundation in the interest which society has that every person shall be encouraged to make the most beneficial use of his property the circumstances will admit of. Kerr v. Kingsbury, supra;Manwaring v. Jenison, 61 Mich. 117. Throughout all the lumbering regions of Michigan, saw mill operators erected engine and mill foundations of brick, stone and concrete, to which their machinery was attached, and this machinery was usually covered with buildings of a more or less permanent character; and no one ever contended that, though these buildings were erected upon land, the title to which was not in the saw mill builder or operator, he did not have a right to remove his mill when the timber was cut or removed from the premises.

The reason property of this kind is personal, rather than real, is based upon the rule the law implies an agreement that it shall remain personal property from the fact the lessor contributes nothing thereto and should not be enriched at the expense of his tenant when it was placed upon the real estate of the landlord with his consent. There is no unity of title between the owner of the land and the owner of the structures, and the buildings were not erected as permanent improvements to the real estate, but to aid the lessee or licensee in the use of his interest in the premises.

The decree of the trial court is reversed, with costs.